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and its Cigna deal
Disaster lurks in scheme to build customer portals
By Kathy Sharpe
It was with wry amusement that I read of Yahoo’s deal to develop personalized web portals for 16 million customers of Cigna’s health care and retirement benefit plans.
I’m sure Yahoo CEO Terry Semel sees this nonsense as an alternative revenue stream, since Yahoo’s advertising bread currently has no butter.
But one slight misstep and Yahoo will be toast, regardless of the butter.
This deal is fraught with so much peril that it is hard to know where to begin.
First there is the pure spectator sport of watching whether Yahoo, which has never been in the service business, can meet the mid-year deadlines it has set not only to build the system but to construct it in a manner that will meet all the complex needs of the constituencies.
This is a portal company build around breadcrumb navigation: yahoo.com.
It has never built anything that remotely has to do with the range of visitor scenarios that insurance sites must provide.
Moreover, it almost certainly will be caught between its new client Cigna and Cigna's clients, the various employers of those 16 million folks, each of whom will want its own variations on a theme.
My prognosis: not good.
I suspect the unspoken driver of the deal is to sell ads (if not products) on these portals to the very targeted health-care-category audience, with split revenue helping both sides recoup their investments.
No one is promising any third party audits, but from a distance the upside must look lush.
Closer up the question is whether employees will want ads in an "internal, private" space. There's also the question of how the product mix, not to mention all that backend stuff aka fulfillment, will be managed. There are a lot of nasty details to figure out.
Finally, there is the whole issue of conflict of interest.
Yahoo is now a development/portal/ad sales company, which means its sales forces will presumably be walking into agency offices with media presentations in one hand, while its portal sales team picks the agencies' pockets for development business.
This may actually work in the current environment, but long term it will undermine relationships that Yahoo will need.
From a media buying perspective, its ad sales force is difficult enough to deal with already.
This is a Semel "Hollywood" power play if anything, but it is a long march from signing the deal to launch, so in the meantime we will be watching Yahoo closely.
January 17, 2002 © 2002 Media Life
-Kathy Sharpe is the founder of and a partner in Sharpe Partners, a privately owned full-service interactive marketing agency based in New York.
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